Deloitte to study Rohit Nandan Committee report on air connectivity

Devesh Kumar   New Delhi     Last Updated: January 10, 2013  | 10:47 IST

The Ministry of Civil Aviation has enlisted the services of Deloitte, the reputed consultancy firm, to study the Rohit Nandan Committee report on air connectivity and recommend measures within a month to connect smaller towns and cities on a low-cost basis.

PLAN FOR BETTER CONNECTIVITY

  • Consultancy firm Deloitte will study the Rohit Nandan Committee report on air connectivity and recommend measures within a month to connect smaller towns and cities on a low-cost basis
  • The Committee wants the ministry to devise ways to operationalise 225 airports in the next two decades. Of these, 160 airports are run by state governments and 57 are owned by private players
  • The Committee suggested two measures to address the concern— critical viability gap funding, and adoption of low-cost models 'so that airlines can utilise their services more efficiently and cost effectively'
  • The government is now contemplating a change in route dispersal guidelines and setting up a corpus, Regional Air Connectivity Fund
The Committee, which was set in April 2011 "to explore policy initiatives for expansion of air connectivity in the country", submitted its report in January 2012.

Deloitte's suggestions, according to sources in the ministry, would form the basis for a policy that will be framed by the Centre to bring smaller towns and cities within the air route network in due course.

The Centre for Asia Pacific Aviation (Capa) in its 2009 report on low cost terminals concluded that "no Indian should be more than 50 km away from an airport". The Indian authorities find this surmise overambitious in view of the country's economic situation and availability of resources.

There are 457 functional and non-functional airports. Of these, 91 are managed by the Airports Authority of India (AAI), and 125 by the armed forces.

In keeping with the Committee's recommendations, the government is now contemplating a change in route dispersal guidelines (RDGs), formulated in 1994 and revised in 2003, and setting up a corpus, Regional Air Connectivity Fund (RACF).

"By the existing RDGs, all scheduled airlines have to operate on certain non-profit routes, particularly in Jammu and Kashmir, the North East and Andaman and Nicobar Islands, and they have to set aside 10 per cent of their profits from the main trunk routes to operations in these sectors. This system is clearly not working," said Director General of Civil Aviation Arun Mishra, adding "by its very logic, air operations to smaller cities and towns will be non-profitable." The Committee also suggested setting up the RACF "through cess on domestic passengers chargeable through tickets and deposited in the fund."

The cess, it said, could be fixed at either Rs 25 or Rs 50 per passenger. The bulwark of air connectivity expansion, according to Mishra, would be low-cost, nofrills airlines and low-cost airports.

The Committee threw ample light on this aspect. "It needs to be emphasised that the development of regional airports or low-cost airports should not be looked upon merely as an accessory to cater for the needs of low-cost carriers," it said.

These low-cost carriers would typically comprise 40, 60 or 80-seater aircraft and could operate from runways measuring 1,250 metres, which could at a later stage be enlarged to 2,000 metres for larger aircraft.

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